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Veteran Advisor

Floor Talk July 11 (Report Day)

At the close:

 

The Dec. corn futures settled 8 cents lower at $3.84.

 

Nov. soybean futures closed 18 cents lower at $10.75.

Sep. wheat futures finished 22 1/2 cents lower at $5.26.

 

The Dec. soymeal futures contract closed $4.80 per short ton lower at $345.00. The Dec. soyoil futures finished $0.64 lower at $36.96.
In the outside markets, the NYMEX Brent crude oil is $2.30 per barrel lower, the dollar is lower and the Dow Jones Industrials are 16 points higher.

 

Mike

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At mid-day:

The Dec. corn futures are trading 7 1/2 cents lower at $3.85.

 

Nov. soybean futures are trading 17 3/4 cents lower at $10.75. The Aug is down 43 cents at $11.89.

Sep. wheat futures are 18 1/2 cents lower at $5.30.

 

The Dec. soymeal futures contract is trading $5.90 per short ton lower at $343.90. The Dec. soyoil futures are trading $0.51 lower at $37.09.
In the outside markets, the NYMEX Brent crude oil is $1.63 per barrel lower, the dollar is higher and the Dow Jones Industrials are 26 points lower.

 

Mike

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At 11am: The Dec. corn is 6 cents lower, 3 cents away from new lows. The Nov. soybeans are down 19 cents, and Aug. is 54 cents lower, new lows! For Sep wheat, that contract is 14 cents lower.

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USDA/WASDE SAYS:

*Stocks as of June 30 (wheat) and Aug. 31 (corn and soybeans)

 

2013/14 U.S. Corn Carryout:

  1.246 billion bushels vs. the trade's expectations of 1.232 billion bushels and the USDA's June estimate of 1.146 billion.

 

2013/14 U.S. Soybean Carryout:

   140 million bushels vs. the trade's expectations of 128 million bushels and the USDA's June est. of 125 million.

 

2014/15 U.S. Corn Carryout:

    1.801 billion bushels vs. the trade's expectations of 1.774 billion bushels and the USDA's June 1.726 bill.

 

2014/15 U.S. Soybean Carryout:

  415 million bushels vs. the trade's expectations of 418 million bushels and the USDA's June 325 million.

 

U.S. CROP PRODUCTION

The national average corn yield remains projected at a record 165.3 bushels per acre. Favorable early July crop
 conditions and weather support an outlook for record yields across most of the Corn Belt, however, for
much of the crop, the critical pollination period will be during middle and late July. At the projected
13,860 million bushels, this year’s crop remains just 65 million bushels below last year’s record.
 The soybean yield is projected at 45.2 bushels per acre, unchanged from last month.

 

What do you all think of these numbers? Corn is down 4 1/2 cents lower, soybeans are down 7 cents lower, and wheat is down 14 cents.

 

TRADE REACTION:

--Pablo Fraga, Market Research Specialist with BLD in Argentina, reacts to today's USDA/WASDE Reports with the following thoughts: "

"As everybody, I am surprise about bearish market as I had assumed that prices were low enough after 30th June report.  Soybean production of 3800 mill bushels was easy to calculate with June 30 planted acres. It was difficult to see better yields as the ones in June WASDE were record. Taking into account everything I read about US weather, it seems that soybeans are doing well and by now we can think about those 45,2 yield.  However we know that weather is not always as we expect and last August is a perfect example for that. About demand, China has 1 MMT more than June and 4 more (5,8%) vs 2013/14. If soybean price is going to be as low as now ( 1100 cents) may be China will come for more. China has bought only 7 MMT of 2014/15 US soybeans vs 9,8 MMT 2013/14. The thing here is that South America had a very good season and China bought a lot these months. I like to believe that USDA is underestimating China demand, but it is impossible to know.
What I really don’t understand is what happened with 2013/14 figures. What is “residual” and how can it be negative -1,87 MMT ??? In Argentina we tend to see conspiracy everywhere… can this be a USDA move to low soybeans cash prices and import cheaper from Brazil? I don’t want to believe this, but I can't understand negative residual either. We have more crush, more exports, less imports and…. More ending stocks?????
In Argentina prices have been falling since last month and the situation starts to be critical. Only 24,5 MMT have been sold with 55,5 MMT production. The rest is sleeping in bags waiting for another devaluation. What nowbody though about is that Chicago can be lower… 35 days ago soybean was 330 u$s/tn and now is only 285 u$s/tn in the local market.
About corn, as always I think USDA is overestimating supply and underestimating demand. Speculative funds are playing now and me be corn can go lower. More beginning stocks, same production = big ending stocks. May be at the end of the year we can see a bull market with ethanol and feed demand playing. In Argentina, corn prices are extremely low and we are harvesting double crop corn. I don’t know who is going to plant corn in Sep/Oct if prices keep like this… The gov is not going to eliminate export taxes, so we will plant less corn again," Fraga says.

 

--Mike North, First Capitol Ag Risk Advisor, says the 2014 yield was left alone, so the points of interest were the balance sheets.  "Most notable was the -69 million bushel residual use number that concedes the USDA’s inaccuracy concerning previous marketing years supply or demand.  The increase in both crush and exports for both crop years is not a surprise given export pace and cash market strength.  The corn balance sheet grew by 100 million bushels.  The USDA finally reduced feed usage, but only by 125 million.  Ethanol grind grew by 25 million.  The 2014/15 feed demand was reduced as well, but by 50 million bushels.  Of interest also was the greater reduction to harvested acres.  While the June 30 report showed only a slight change in area, the WASDE Harvested acreage number dropped by 500,000 acres, accounting for some of the drowned out areas saturated with too much rain.  World numbers showed another increase in beginning stocks numbers by 4 million metric tonnes as well as some production growth that took ending stocks 5 ½ million metric tonnes higher.  World soybean numbers were within expectations.--This report has nothing major in it. The numbers were as expected. Nothing here to change the market trend. The 2014/15 wheat carryout number is very ugly-bearish. The 2014/15 corn carryout is really bearish."

 

--Sal Gilbertie, Teucrium Trading, says that today’s WASDE report has confirmed the widely held belief that supplies of the major grains will be more than adequate in the coming year.
"Many in the trade believe yields may still have some room to be raised, especially for corn, although projected usage declines in corn seem a bit surprising and future upward usage revisions could potentially be offset by increased future yield projections.
Overall, today’s report, coupled with current near-perfect growing conditions across the globe, is good news for consumers and end users of grains, because prices are already being driven quickly toward the low end of the USDA’s projected on-farm price ranges for corn and wheat. Soybeans may have a bit more room on the downside given the large increase in projected new crop ending stocks. However, current low-end range pricing does not bode well for unhedged farmer producers or active speculators who have not yet established short positions. It seems likely some consumer buying and producer-hedger short covering could potentially begin to enter the markets at the current low-end price range, as might asset allocator buying for investors needing to re-weight grains in their portfolios.
The markets seem poised for a tug of war at current levels, perfect weather conditions will need to remain to give the bears more strength, but any change in current ideal growing conditions could potentially give bulls some room to run."

 

 

Mike

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U.S. At the open:

 

The Dec. corn futures are trading 1 cent higher at $3.93.

 

 

 

Nov. soybean futures are trading 2 cents higher at $10.95.

Sep. wheat futures are 1 1/2 cents lower at $5.47.

 

 

 

The Dec. soymeal futures contract is trading $2.00 per short ton higher at $351.80. The Dec. soyoil futures are trading $0.24 lower at $37.36.
In the outside markets, the NYMEX Brent crude oil is $0.71 per barrel lower, the dollar is higher and the Dow Jones Industrials are 6 points lower.

 

Mike

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At 7:45am:

Early calls: Corn is seen 2-4 cents higher, soybeans 1-2 cents higher, and wheat 1-2 cents higher.

Trackers:
Overnight grain, soybean markets=Trading higher.

Brent Crude Oil=$0.49 per barrel lower.
Dollar= Higher.

Wall Street=Seen higher, as Wells Fargo quarterly earnings beat the street.

World Markets=Europe stocks were higher, Asia/Pacific stocks were lower.

 

 

 

More in a minute,

 

Mike

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9 Replies
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Honored Advisor

Re: Floor Talk July 11 (Report Day)

Survival mode just went into overdrive.
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Frequent Reader

Re: Floor Talk July 11 (Report Day)

My 92 year old grandfather says  the price of grains now is still more than he ever got in the 50's and 60's.

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Veteran Contributor

Re: Floor Talk July 11 (Report Day)

THE CURE FOR LOW PRICES IS LOW PRICES ......OK WE ARE THERE

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Senior Advisor

Re: Floor Talk July 11 (Report Day)

With all do respect Negril, I understand what you saying but what did your Gpa pay for fuel and inputs?
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Veteran Contributor

Re: Floor Talk July 11 (Report Day)

Does the market seem to be over reacting to the news in you folks' opinion? It seems like one heckuva knee jerk reaction-but the traders can sense blood in the water. Darned thieves.

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Senior Contributor

Re: Floor Talk July 11 (Report Day)

If you heard that "BOOM" about half hour ago it was the banks locking the doors shut for this high priced land.   this is nuts.   

I wonder what the land market will do now???    

 

So I have feeder cattle, do I feed the **bleep** corn to the calves, and fatten the calves, or just feed then to 900lbs feeder yearling type animal??   

 

 

 

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Frequent Reader

Re: Floor Talk July 11 (Report Day)

Shaggy my friend, that was the intent. Fuel was 29 cents a gal. and land was a lot less. But the prices of grains are reciding to the levels. my Grnadpa recieved.

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Senior Contributor

Re: Floor Talk July 11 (Report Day)

Just remember endusers like Dairy, Hog, and Beef farmers are buying land. Record prices for land in Dairy country. 

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Senior Advisor

Re: Floor Talk July 11 (Report Day)

I understand Negril, I'm sure your Gpa's yield expectations weren't nearly as high as what we aim for today either. It's always nice to compare today to years ago.
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